He was born at Buckingham in Buckinghamshire, England in 1591, to a clergyman, Richard Eaton (1569-1616) and Elizabeth Shepheard (1569-1630). He was married to Grace Hiller in 1622, and they had a daughter (Mary), and a son (Samuel) before her death.
In 1625 he remarried, this time to a widow, Anne Yale, who was the daughter of George Lloyd, the bishop of Chester. The couple had three children (Theophilus, Hannah, and Elizabeth), but the household raised eight children. Besides their three, and Mary and Samuel, it included Anne, David, and Thomas Yale from Anne's first marriage to Thomas Yale. In 1631 the younger Anne Yale was married to Edward Hopkins, later the governor of Connecticut.
For several years Theophilus was an agent for the King Charles I to the Danish court, then a merchant in London. He was a puritan interested in colonial development and was one of the original patent holders for the Massachusetts Bay Company. He actually emigrated to New England with the Puritans, arriving in Boston on June 26, 1637.
His group of colonists had John Davenport as their religious leader and they wanted to start their own settlement. That fall Eaton led a exploration to the south, and located a site at Quinnipiac on the northern shore of Long Island Sound. He traded thirteen coats to the local Indians for seven townships of land. In the spring his group moved from Boston and when they arrived on April 14, 1638 they named the site New Haven.
At first he attempted to resume his trade as a merchant. He was not successful since the colony was too new to afford imports and the Indian fur trade was more successful at the Dutch outposts at Hartford, so he soon turned to framing.
When the New Haven Colony established its administration, he was one of the seven councilors. He was elected as the first governor on June 4, 1639 and reelected each year until his death on January 7, 1657/8. His major accomplishment as governor was the creation of a written legal code for the colony in 1656.